Flexible Budget for Fabrication Department Cabinaire Inc. is one of the largest

Question

Flexible Budget for Fabrication Department Cabinaire Inc. is one of the largest manufacturers of office furniture in the United States. In Grand Rapids, Michigan, it produces filing cabinets in two departments: Fabrication and Trim Assembly. Assume the following information for the Fabrication Department: Steel per filing cabinet Direct labor per filing cabinet Supervisor salaries Depreciation Direct labor rate Steel cost Prepare a flexible budget for 12,000, 15,000, and 18,000 filing cabinets for the month of October 2016, similar to Exhibit 5, assuming that inventories are not significant. Enter all amounts as positive numbers 31 pounds 20 minutes $111,000 per month $30,000 per month $24 per hour $1.39 per pound Cabinaire Inc-Fabrication Department Flexible Production Budget October 2016 (assumed data Units of production 12,000 15,000 18,000 Variable cost: Direct labor Direct materials Total variable cost Fixed cost: Supervisor salaries

Explanation / Answer

Units of production 12000 15000 18000 Variable costs: Direct labor 517080 646350 775620 Direct materials 96000 120000 144000 Total Variable costs 613080 766350 919620 Fixed costs: Supervisor salaries 111000 111000 111000 Depreciation 30000 30000 30000 Total Fixed costs 141000 141000 141000 Total department cost 754080 907350 1060620

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